When making a real estate investment, the overall goal is to purchase a property that will give its investors a good return. For example, many investors will purchase homes and/or condos to fix-up and flip or hold as a rental property. In today’s market there are investors that have properties for short-term rental, while others prefer to offer homes and condos to long-term renters (at least 12 months). Either path requires some level of property management. Rental property management can be outsourced to another company, or you can choose to do it yourself.
Good rental property management will help protect your investment and provide quality customer service to the renters. If handled poorly, it can lead to unhappy tenants, potential legal fees, additional repair costs and unnecessary stress. Here are three tips to consider if you are new to rental property management:
1. Attracting the right tenant
Finding the right tenant begins with advertising it the right way and in the right place. The first step is taking photos of the interior and exterior of the property to make sure it is properly presented. Getting quality photos of the property will give potential tenants a clearer idea of the space and its amenities. In addition to photos, you will need to write copy that describes the property accurately and highlights what makes it a desirable place to live. Make sure all specificifications are noted in the listing and include details such as if pets are allowed, parking, storage and what the monthly rent includes. Advertising your property on rental websites will help get eyes on your property and encourage potential renters to apply.
2. Screening applicants
It is important to provide an application that will allow you to review a potential renter to make sure they have solid credit and will be able to pay the rent required. You can also conduct background checks and references to try to ensure they have a been good renters in the past. The application also allows you to check employment history and reason for
When reviewing the applicants, make sure you are complying with all the fair housing laws in your state. These laws prohibit discrimination based on race, age, nationality, sex, and other criteria. There are many other state and federal laws that must be followed to ensure you can properly manage your property and avoid any unnecessary legal fees.
3. Marketing the property
Listings and ads are standard for marketing a rental property, but you may need to do more. Depending on the market, the property location, and the services your rental property management provides, you may consider hosting an open house to view the space available. This will allow possible renters to tour the property before continuing with the application process. It also allows many people to view the property during an allotted timeframe rather than setting up separate showings. Social media is also a valuable tool for marketing a rental property available in a specific community. Consider posting information and sharing in neighborhood Facebook groups and other platforms.
4. Decide how to manage your property
Rental property management can be a lot for someone to do themselves. A landlord must be prepared to handle any and all problems that arise, as well as take care of regular management activities. One benefit of taking care of property management yourself is having total control and immediate knowledge of issues. It also saves you money – not paying someone else. But this will require time. Although it allows for total control, it can be demanding, if you have a difficult tenant or the property needs repairs. Having to keep track of so many moving parts can be a lot for one person to take on, especially if they have little to no knowledge of rental property management.
Fortunately, if you decide it is too much for you to take on, there are plenty of property management companies you can outsource to and options on how much or little you can have them do. Some companies will take over partial duties, or the entire management of your property. When deciding what is right for you, it is important to take into consideration the costs as well as time you have available to manage a property and its tenants.
5. Keep the proper records
Even if you hire a professional rental property management company, it is important to keep your own records. Some things that are important to have and keep safe are a copy of your property and landlords’ insurance. These documents will protect you in the event of any accidents or sudden losses due to fire or severe weather and may cover things such as damage by tenants, injuries, or legal fees. Other documents that are important to keep records of are the rental applications. Keeping all the applications for your property will help if an applicant files a discrimination claim or if there are any emergencies with your current tenants. It is also important to store your lease agreements safely and securely, as well as rental receipts. Keeping proper records will help protect your rights and the rights of your tenants.
Real estate investments can be complicated. If you are purchasing a residential property for rental or for yourself, the team at Landmark Title is available to successfully manage your escrow and title services. Contact us to learn more about how we can help.